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| Guides and Calculators |
» Credit ScoreAn approximate rating of your credit score as a guideline for loan qualification.
» Amortization CalculatorDetail how much of your payment goes to principal and interest annually over the life of your mortgage loan.
» Mortgage Loan CostCalculate the total cost of your mortgage (effictive loan amount and APR) with your interest, points and closing costs.
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Home Finance - Financing, Mortgage and Loan Information and Resources
The following information and resources on home financing, mortgages and lending programs includes tips on pre qualifying for your mortgage, how to find the best mortgage, calculators to help you make home financing decisions, and a glossary of lending terms. Resources listed below include links to associations and organizations that provide additional financing information.
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Finding The Best Mortgage |
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Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage--whether it’s a home purchase, a refinancing, or a home equity loan--is a product, just like a car, so the price and terms may be negotiable. You’ll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of dollars.
Obtain Information from Several Lenders
Home loans are available from several types of lenders--thrift institutions, commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker. Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Consequently, you should consider contacting more than one broker, just as you should with banks or thrift institutions.
Whether you are dealing with a lender or a broker may not always be clear. Some financial institutions operate as both lenders and brokers. And most brokers’ advertisements do not use the word "broker." Therefore, be sure to ask whether a broker is involved. This information is important because brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination or other fees. A broker’s compensation may be in the form of "points" paid at closing or as an add-on to your interest rate, or both. You should ask each broker you work with how he or she will be compensated so that you can compare the different fees. Be prepared to negotiate with the brokers as well as the lenders. » Continued...
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Preapproval is a lender's written commitment to finance a home purchase up to a specific amount. Getting preapproved can be a smart move for homebuyers since it shows sellers that a buyer is ready to complete the transaction.
Preapproval vs. Prequalification: preapproval indicates that a lender has taken a detailed look into a buyers financial background and has committed to lend a certain amount of money, pending property details. Preapproval includes a credit check, so it can be more compelling than a prequalification letter, which generally just estimates what a buyer can afford based on the information provided.
Preapproval signifies a lender's written commitment to finance a home purchase up to a specific amount. Preapproval indicates that a lender has taken a detailed look into your financial background and has committed to lend you a certain amount of money, pending specific property details. Because preapproval includes a credit check, it's more powerful than a prequalification letter, which generally only estimates what you can afford based on information you've provided.
What are the advantages of being preapproved?
Preapproval offers a number of advantages over waiting to apply for a mortgage until after you've found a home, including shopping for a home knowing exactly what you can afford' and finding out about possible qualification problems early in the homebuying process.
Preapproval is an advantage for anyone buying a home, but can be particularly useful for first time buyers as well as those who are self-employed or work on commission.
For first-time homebuyers: without a record of previous mortgage payments, sellers could view first-time homebuyers as less likely to obtain financing than a homebuyer who has already met mortgage obligations. A preapproval helps demonstrate to the seller that a lender has examined the finances and is willing to proceed with the lending transaction.
Self-employed buyers or commissioned employeesare people whose incomes can fluctuate. Self-employed or commissioned buyers may lack the financial documentation of salaried employees, which can send up a warning flag to certain sellers. Demonstrating that a lender has already considered these factors will help reduce this risk.
Before you begin shopping for a home, submit your financial information to a lending institution. They will review your loan application and if you qualify, they will provide a written preapproval for a specific mortgage amount, down payment, and interest rate, subject to the terms of the commitment statement. The loan commitment letter can then be finalized after information about the home, often including an appraisal, is submitted.
The Mortgage Bankers Association (MBA) is a Washington, D.C.-based trade association representing over 3,000 members who originate and service mortgages for homes and commercial properties throughout the country. MBA is made up of many different types and sizes of companies which make up the real estate finance industry, including: mortgage bankers, mortgage brokers, commercial banks, credit unions, savings and loan associations, savings banks, and life insurance companies. www.mortgagebankers.org.
A Plain & Simple Guide For First Time Home Buyers from the The Mortgage Bankers Association, contains information on getting started, how to choose a lender, what information the lender will need, loan types, and special programs and resources for the first time home buyer that may allow you to buy a home with a lower down payment, with guidelines that make it easier to qualify.
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